Mottley to WTO: Help us transform

Prime Minister Mia Mottley has thrown out a challenge to the World Trade Organisation (WTO) to do more to help poor and developing countries affected by the climate crisis to create the necessary fiscal space needed for adaptation.

At the same time, she has reiterated her call for “an appropriate” financing mechanism to be put in place to help those countries transform their energy, transportation, agriculture and manufacturing sectors and put mitigation measures in place. She also insisted that there was need for grants and concessionary loans.

Mottley put forward the case on Wednesday, as she delivered the inaugural WTO Presidential Lecture Series at the WTO’s Geneva, Switzerland headquarters under the theme Reinventing the Global Order.

Pointing out that the constrained fiscal space of developing countries did not provide them with the ability to do more on their own, Mottley suggested that the WTO had contributed to that set-back over the years.

“Many assume that small island developing states and developing countries have large debt stocks purely because of corruption and profligacy, when in truth and in fact, the work that is being done by UNCTAD and in the CARICOM region, is showing more and more that a lot of that debt has come as a result of one, the climate crisis,” said Mottley.

“And, madam Director General, I have to say this, although many may not want to hear it, that since the establishment of this August institution and its failure to accept the need for special and differential treatment, our countries have also seen significant contraction in our domestic productive capacity in industry, in manufacturing and in agriculture, largely as a result of the people who occupy this room not being able to accept that there truly is a genuine trigger for those countries that will not distort global trade in goods and services,” she said.

In fact, Mottley noted that since 1997, Barbados had witnessed a contraction in manufacturing by over one-third and a decline in the agriculture sector by more than 20 per cent.

Pointing to the non-existent impact of countries such as Barbados on global trade, Mottley further indicated that “Our share in global goods is 0.000 per cent, and our share of global share in services is 0.0001 per cent.

“So when you combine that across the board it cannot be difficult to distinguish between those countries that can truly distort and those countries for whom the lash is just too heavy a burden, leading to that highly indebted set of circumstances to which I referred,” she explained.

Mottley also made it clear that “rich industrialized countries telling poor countries and less industrialised nations that they should care more for the environment” will not solve the climate crisis problem.

“Indeed, our ability to be able to spend money on mitigation and adaptation is constrained by that simple absence of fiscal space that has been triggered by the highly-indebted condition that we have developed and come to accept for the last three decades in particular,” said Mottley.

“The climate crisis will not be solved by an economic system based on prices determined by today’s supply and demand with inadequate regard for the future, and we will not solve it by techno-optimism and some loose change being thrown at people.

“The world needs to spend about US$3 trillion a year on investments to transition to renewable and regenerative energy, transport and agriculture. And the more we talk about it and the less we do it, the more critical the problem becomes,” she warned.

While indicating that the amount of money was not the biggest challenge facing the developing world, Mottley said the main challenge was that “we are stuck at base camp” because of our aim and an absence of an appropriate finance mechanism.

The prime minister again proposed that a sum of US$500 billion be placed in a special trust for a period of 20 years to help poor and developing countries transform their energy and agriculture sectors and fill the climate financing gap.

“Even if the sum of US$500 billion in SDRs annually for 20 years appears to be a bridge too far, then we should at least settle on the first US$500 billion, which in lending to the private sector could unlock at least another US$2 trillion to $3 trillion needed to get the ball rolling, and if it proves to be successful then we go at it again and again, until we can settle the world’s preparation for this climate crisis through our ability to mitigate and to adapt accordingly,” she argued.

“That US$12 trillion of central bank reserves that are being kept dry for a rainy day, well what is it? It is a rainy day and it is time to use them. I hope therefore, we can continue to build support on these measures, on this idea, with those of you in the G20 countries and those of you who like us are outside of the G20 but who are truly concerned about what we are doing.

In 2009, wealthy countries agreed to “mobilise” $100 billion in climate finance per year by 2020 – a target they have not met. Currently, close to $50 billion has been pledged to developing countries.

Mottley also argued, “We can halt the climate crisis fastest if someone with the right ideas, skills and experience in one country could, with the help of a very low cost fund from the Climate Mitigation Trust, raise additional capital that they need in another country where it is cheapest.

“That is what this organisation (the WTO) was set up to help us do. In building our coalition for change, we want those countries with capital to be united in common cause with those with technology and climate mitigation opportunities, because if we cannot bridge all three we will not solve the problems and create opportunities for all,” said Mottley. marlonmadden@barbadostoday.bb